FYI: We've seen some interesting trends in the commodities space over the last few weeks. As shown in the snapshot from our Trend Analyzer tool below, the precious metals group has been surging higher and now sits in extreme overbought territory, while the energy and agriculture groups sit in extreme oversold territory.
Both gold (GLD) and silver (SLV) are up 5%+ over the last week, and they're now 7%+ above their 50-day moving averages. This has left them more than two standard deviations above their 50-day moving averages. Even though our trend algorithm now shows them as being in 6-month uptrends, the fact that they're so extended to the upside gives them a "poor" timing rating. An investor looking to get long the space would be better served waiting for some downside mean reversion.
On the flip-side, base metals (DBB), agriculture (DBA), and energy (DBE) are down 4%+ over the last week and more than two standard deviations below their 50-day moving averages. While they're noted as being in either sideways trends or downtrends, the fact that they're so oversold gives them a "good" timing rating. An investor that has recently seen their actual allocation slip below their target allocation to these areas could add exposure here given how oversold they are.
Regards,
Ted
https://www.bespokepremium.com/interactive/posts/think-big-blog/commodities-internal-divergence
